Bed Bath & Beyond Buys Cost Plus

The deal is worth about $495 million

In a cash transaction, home furnishing retailer Bed Bath & Beyond (NASDAQ:BBBY) announced Wednesday that it will acquire competitor Cost Plus (NASDAQ:CPWM) at the price of $22 per share, which amounts to about $495 million.

Bed Bath & Beyond also has entered into agreements with Red Mountain Capital Partners and Stephens Investment Holdings, the two largest shareholders of Cost Plus. The shareholders have each committed to tender all of their shares, worth about a 26% interest in Cost Plus.

The deal between the two companies is expected to close during Bed Bath & Beyond’s fiscal second quarter. The company said in a press release that it expects the transaction will be slightly accretive to Bed Bath & Beyond’s 2012 earnings.